Bandhan Bank Q2 Net Profit Falls By 5.3% To Rs 920 Crore

The fall in profits was reported on a 22% increase in total income to Rs 2304.9 crore during the quarter over September 2019 quarter.

Private lender, Bandhan Bank on Monday, reported a 5.3% fall in its second-quarter net profit to Rs 920 crore compared to a net profit of Rs 971.8 crore in the year-ago period as the lender has taken accelerated additional provision on standard assets amounting to Rs 300.0 crore for COVID-19.
On a sequential basis, net profit for the quarter increased by 67.3%. 

The fall in profits was reported on a 22% increase in total income to Rs 2304.9 crore during the quarter over September 2019 quarter.

Bank's profit before tax (PBT) rose 6.2% to Rs 1,233 crore during the quarter, and tax expense spurted 65.09% to Rs 312.99 crore compared to the year-ago period.
Bandhan's net interest income (NII) for the quarter grew by 25.8% to Rs 1,923.1 crore as against ₹1,529.0 crores, and total advances grew by 19.4% to Rs 76,614.6 crore as of September 30, 2020.

Commenting on the results, Chandra Shekhar Ghosh, Managing Director, and Chief Executive Officer, Bandhan Bank, said, "As the moratorium ended on August 31, 2020, coupled with robust rural performance, we have seen an all-round improvement in collection, disbursement, and deposits. On deposits front, we have witnessed the best ever quarter whereas, on the disbursement front, we are close to pre-covid level."

The lender also announced plans to get into the retail lending segment, to sell gold loans, consumption loans for white goods, vehicle loans, and unsecured personal loans, majorly eyeing the business which can get generated from its rural focus.

"Collections have seen a steady improvement month on month and is expected to reach near normal in the next 90 days. We now look forward to accelerate the business in H2FY 21," said Mr. Ghosh.

A high quantum of liquidity impacted the margins as the deposit growth was at nearly 16%, in line with other lenders. The bank hopes for a revival on the advances side in the second half, which will improve margins.

From an asset quality perspective, the gross non-performing assets (GNPAs) as of September 30, 2020, stood at 1.2% against 1.8% as on September 30, 2019, and 1.5% on March 31, 2020. The GNPA would have been at 1.5% if not for the Supreme Court mandate on non-classification of certain loan accounts as a dud. 

The net NPAs stood at 0.4% as on September 30, 2020 against 0.6% as on September 30, 2019 and 0.6% as on March 31, 2020. Bank's total advances grew 19.4% to Rs 76,614.6 crore, and total deposits increased by 34.4% to Rs 66,127.7 crore during the quarter.

Meanwhile, the bank's board on Monday has approved the reappointment of Chandra Shekhar Ghosh as the Managing Director & CEO of the bank for a period of five years with effect from July 10, 2021, subject to the approval of the Reserve Bank of India (RBI) and the shareholders at the ensuing annual general meeting (AGM).

Bandhan Bank shares on Monday closed up 4.01% at Rs 300.85 in a firm Mumbai market, valuing the private lender at Rs 48,448 crore.